TOWN OF SUDBURY LAND VALUE ANALYSIS FOR FORMER MELONE PROPERTY

Transcription

1 TOWN OF SUDBURY LAND VALUE ANALYSIS FOR FORMER MELONE PROPERTY LARRY KOFF & ASSOCIATES WITH BLUESTONE PLANNING GROUP AVERY ASSOCIATES SEPTEMBER 6, 2012

2 TABLE OF CONTENTS SUMMARY REPORT 1 Study Area Context 3 Market Context 4 Market Assessment of Land Use Alternatives 5 Commercial 6 Residential 7 Potential Development Program 8 FULL REPORT 10 Introduction 10 Context 11 Study Area 11 Physical Description 12 Net Buildable Area 13 Surrounding 14 Local and Regional Market Areas 14 Demographic Trends 16 Economic Trends 19 Housing Trends 22 Area Traffic Conditions 24 Market Assessment of Land Use Alternatives 25 Overview 25 Commercial Market 25 Residential Market 28 Potential Development Program 33 Assumptions 33 Alternatives 33 Value Ranking 35 Recommendations/Next Steps 36 Appendix Kick Off Meeting Minutes July 19th 37

3 SUMMARY REPORT STUDY PURPOSE / SUMMARY OF FINDINGS The Town of Sudbury asked, a land use planning firm, and its consultant team to investigate the potential land value of a Town-owned site (formerly known as the Melone property) along North Road in the northeast corner of Sudbury if it were to be sold by the Town for private redevelopment. 1 For years, the site has been used for sand and gravel excavation. However those operations will end in approximately two years. Many options for reuse of the former Melone property have been suggested - ranging from Town recreation to housing and commercial development. This study investigates the market for a range of private redevelopment alternatives and ranks the order-of-magnitude estimated sales value to the town at this point in time. After examining the market potential and physical feasibility of the site to accommodate a broad range of commercial and residential development scenarios, the consultant team found severe market limitations in the short term on all but the residential development options. Of the commercial alternatives, only office development has significant development potential in the longer term possibly ten years out. Given these market findings, the consultant team undertook a more detailed assessment of the potential value of the property for the following use alternatives, shown on Table 1. The range of land values shown in Table 1 is based on a per unit estimate of the current market value for land assuming a number of factors including the proposed use and density, soft costs including project planning and engineering, as well as infrastructure. The ranking of values as noted in Table 1 takes into account a blend of two factors including potential land value as well as marketing time, i.e., the risk associated with the development process. Potential values reflect market-rate uses. 2 Table 1 Value Ranking of Alternatives 3 Buildout (Sudbury Portion Only) Potential Land Value Marketing Time 1. Multifamily Rental 250 units $7.5M - $8.75M years 2. Garden Condo 250 units $11.25M $13.75M 3-5 years 3. Townhouse Condo 83 units $6.5M $8.0M 2-4 years 4. Single Family 15 units $3.75M - $4.0M 1-2 years 5. Office 260,000 s.f. $2.6M - $3.9M 10+ years 6. Assisted Living 90 units?? years 1 The Team includes Bluestone Planning Group, Urban Design, Avery Associates, Appraisal. 2 Land value would be reduced by the inclusion of affordable residential units into the mix; the per unit rate would be zero for the affordable units, so that the potential value would be determined based upon then number of market rate units. 3 This ranking is based upon an order of magnitude assessment of values which is limited by the lack of zoning, identification of infrastructure costs, and great uncertainty in the real estate and financial markets. These values should be considered only for the purposes of ranking and do not reflect the value of a market transaction at this time. Sept 06,

4 The greatest site value currently would be for either multifamily rental or garden condo development, closely followed by a townhouse condo complex. Taking marketing time into account, multifamily rental ranks first in spite of the higher potential value of garden condos, because of a reduced present worth of return. Moreover, the current economic uncertainty makes ownership models more risky for Town s disposition. While estimates assume full payment at the time of closing, the Town may not receive full value of property for some time, as many ownership developments are structured so that land is paid for as units are sold. A multifamily rental would be the most feasible/highest value option at this time for the town to dispose of the property. A development of smaller, lower value townhouse condos might reduce the time for marketing but it would also reduce the value of this alternative to the town. Single family housing might be the least risky option but it would return less to the town than the other residential options. An office use would be a higher risk, speculative land bank option for the town allowing interim uses until the market for this use might reappear. RECOMMENDATIONS Decide on short/vs. long term strategy Given the market uncertainty, the Town should either pursue a the highest market value option (multifamily rental) and the permitting strategy which could make this happen in the shortest possible time, or continue holding the property until the market improves to support another alternative for property disposition. Alternative public purposes or considerations might be combined with either short or long term strategies. Prepare site and regulatory strategy for site disposition It has been estimated that it will take the town two to three years to prepare the site for disposition. Market conditions can change significantly during this time. If the town chooses to pursue a redevelopment option, it will need to revisit the recommendations of this report while working on a disposition strategy including possibly preparing a developer s kit with guidelines to test market interest. Also, to the extent that the Town can reduce investor risk by building support of relevant town departments, obtaining support for re-zoning, testing the soils to ensure a favorable percolation rate for the proposed uses, securing site control of abutting properties, and relocating the access, for example, the town will ensure that they will obtain a greater value for the site. Sept 06,

5 STUDY AREA CONTEXT The proposed development site is a group of properties which formerly comprised the Melone Gravel Pit property. The site straddles the town line between Sudbury and Concord. Portions of the parcel are constrained by wetland buffers, steep slopes, and water resource boundaries. Table 2 Site Gross Area and Net Developable Area Total Area (acres) Developable Area (acres) Town (Melone) Property (Sudbury) Town (Melone) Property (Concord) 16 4 ConCom Property 10 0 Water District Property Wagner Property 1 1 Total Study Area Total Sudbury Portion Map 1 Melone Property Existing Conditions / Development Areas Surroundings The site is located off North Road (Route 117), a rural but often busy road connecting the towns of Concord and Maynard, and is situated 2.5 miles from the train station in West Concord and 3 miles from the Lincoln train station. Surrounding the site is a rural setting, bordered to the west by two age restricted developments and an office development in a campus setting, wetlands to the north and east, agricultural fields and a water supply well to the immediate south, and a series of walking trails in the town of Concord. Sept 06,

6 Map 2 Features in Adjacent Parcels MARKET CONTEXT The former Melone site is located in the center of a rural area of the western suburbs, almost equidistant (7 to 10 miles) between Routes 128, 495, and I-90. Within 2.5 miles of the site (5-10 minute driving radius) small neighborhood centers provide small-scale specialty and convenience shopping, especially along Route 62 and to a much more limited extent at Sudbury Road and Route 117. Within 5 miles radius (10-20 minute driving distance depending upon the time of day) major retail centers and office developments exist in all directions (see Map 3 below). Sept 06,

7 MARKET ISSUES AND OPPORTUNITIES Table 3 Strengths and Weaknesses Strengths Weaknesses Large, vacant site Good access to State road Few abutters Connectivity to adjacent housing sites and trail system Town-owned 14,000 vehicles/day, limited traffic lights Distance from major highways, public transit and retail services Lack of sewer infrastructure Need for zoning changes Developable area limited by topography, town boundary, environmental and water resource areas Uses limited by environmental regulations Traffic LOS / Level of Service at F during commuting hours: as are other major roads in area Regional/Local Demographics, Economic and Housing Trends Sudbury has a population of 17,700, which has grown by 5% since The proportion of older adults and seniors is growing, while 50% of the town s households are families with children. Median Household income in 2010 was $153,000. Older residents tend to live in smaller households, and have less income. Businesses in Sudbury provide over 8,000 jobs, averaging $60,000 in annual wages. The largest proportion of jobs are in Education and Health Services, Trade, Transportation and Utilities, as well as professional and business services, and leisure and hospitality services. Raytheon is the town s largest employer as well as the only significantly sized engineering firm with over 1000 employees on site. Over 90% of Sudbury s housing stock is single family homes, averaging $628,000 assessed value in In the decade , 369 units were constructed of which 49% were agerestricted condos. Local zoning limits development to single-family homes and age restricted duplex, condo, townhouse and apartments. Of eight neighboring towns, Sudbury has the third lowest density, with 245 housing units/sq. mile. Sudbury has the lowest percentage of rental housing, the highest median rents, and highest percentage of large units (22% have 5+ bedrooms). 4 MARKET ASSESSMENT OF LAND USE ALTERNATIVES Overview A Steering Committee of Town staff and elected/appointed board and committee members identified a range of alternatives for consideration. The market for a variety of commercial and residential uses was evaluated based upon an Issues and Opportunities Analysis, and a survey of the local and regional residential and commercial real estate market. Of the range of market segments analyzed, the consultant team has concluded that residential uses clearly have the greatest development potential at this location. There is potential for office development at this site, but it is a more long-term prospect for redevelopment. 4 Town of Sudbury, Housing Production Plan, July 14, 2011, pps 11,15 Sept 06,

8 Table 4 Initial Market Assessment of Alternatives Land Uses Land Use Market Potential Near Term Long Term Minimal 1. Flex Space 2. Solar 3.Commercial Recreation 4. Retail 5.Office 6. Residential Commercial Market The ongoing recession, the isolated location, the lack of convenient amenities such as public transportation and local retail, and the absence of any on site sewer present significant limitations to commercial development at the current time. By comparison, closer to Routes 128, 495, and in many of the adjacent village and town centers there are a large number of vacant commercial buildings and sites which are for lease or sale at reasonable prices. Nonetheless, the consultant team began this study reviewing the following uses which were confirmed at the kick-off meeting. Flex space: A form of warehouse or light industrial development, typical tenants include local contractors office and storage space, manufacturing/sales, service businesses, and warehouse/distribution uses. Given a surplus of this type of space in the region as well as the concern that tenants might impact local environmental resources, this use is not recommended for further analysis. Retail: The site is not a strong candidate for large-scale retail, nor for neighborhood or specialty retail due to the isolated location, low density surrounding, poor visibility, congested road network, lack of sewer, and surplus of retail in the region along Route 62 in Maynard, Acton, Concord, and along Route 20 in Sudbury and Wayland. Mixed Use: Retail as part of a mixed use development will not thrive in a location which cannot support retail as a single use. A small amount of retail could provide an amenity to a residential or office development in this location, but would not add significant land value to the project. Commercial Recreation: The limited potential market for commercial recreation makes this use highly unlikely due to the constraints of high construction costs for a new facility, competing facilities in the region, and lack of clearly identified sports programming needs. A typical sports complex contains some 80,000 sq ft and requires a revenue stream of some $3,000/day in income to cover the costs of debt service and operations for a new facility. 5 5 Norman Gill, President, Pinnacle Indoor Sports consultant, Phone conversation, July 31, 2012 Sept 06,

9 Solar Farm: It might be possible to develop a solar farm on the site producing up to 4 megawats of power. The availability of publicly owned sites for large installations makes it unlikely for a developer to purchase the site for this use. Furthermore complex enabling legislation and funding uncertainties make it difficult to project the potential revenue from development of a solar farm on the site under Town ownership. Office: Regional statistics as well as local market conditions indicate that, while this might be a good location for a special purpose office building in ten+ years, there is no market for a speculative office or medical office building at this time. 6 7 The experience of Cummings Properties 142 and 144 North Road office buildings (63,000 sq ft and 70,000 sq ft) is a case in point. The rent-up has been slow, and 142 North Road is only 80% occupied with rents of $17.97/ sq ft. Tenants include schools, some medical uses, nonprofits, and a State Agency. Revolabs, a new high tech audio products tenant is the one significant commercial tenant. Larger scale medical-related or nonprofit uses have not had a strong attraction to this location. As medical uses may shy away from the Cummings site due to septic system discharge limitations, the same would apply to the Melone site. Residential Market As dictated by Zoning, Sudbury s housing stock is overwhelmingly owner-occupied single family homes which are suitable for middle-aged adults and family households. Over the past decade, some progress has been made to provide rental and ownership options for seniors, but there are very limited housing alternatives for other population segments such as young professionals. Discussions with brokers, developers, and an analysis of demographic data and market reports indicate strong potential for some new housing types, particularly multifamily housing (both rental and ownership), as well as the continued strength of the market to absorb appropriately priced senior housing including townhouses, and possibly continuing care/assisted living facilities. Multifamily Rental: The apartment rental market is strong, nationally and in the region 8. Apartment units appeal to all age groups and income levels, although isolated sites with limited access to transit, shopping, or services, are a discouragement to some prospective developers. Typical market rents range between $1,095-$2,265 for new construction in the region while Concord Mews is renting 3 bedroom townhouses for $3,100/month. 9 Garden-Style Condo: Condo ownership units in multi-family elevator buildings comparable to a rental building, with possibly larger unit sizes. Pulte Homes, a national developer with projects in Natick, Reading, Waltham, North Andover have been successful selling smaller sized units in 3-4 story buildings for between $200,000 and $450,000. Although agerestricted, Northwoods is a possible example of what such a product might look like, currently selling at a greatly discounted price of approximately $350,000/ unit. 6 Chip Detwiller, R.W. Holmes Real Estate 7 Colliers International, Second quarter report 8 Marcus & Millichap, the Outlook, 2012, page 1 9 Manager at Concord Mews Sept 06,

10 Townhouse Condo: A third residential type that has been popular in Sudbury is townhouse condominiums. These tend to be large units containing up to 2,600 sq ft selling in the $500,000-$700,000 range. The Villages at Old County Road and Carriage Lane are examples. A smaller unit version of this would be Concord Green in West Concord. Age-Restricted Housing: While Sudbury s zoning allows age-restricted multifamily housing, there is some concern that this market is saturated in the short term. Sudbury has 109 agerestricted market rate condos (with an additional 24 units approved but not yet built) and 159 age-restricted affordable rental units. In addition there are 96 market-discounted senior housing units. Another 64 unit affordable rental senior housing development has recently been approved. A number of these developments in the region have had occupancy problems and have requested conversion to market (non-age restricted) housing. 10 A more specialized senior residence, such as an assisted living/continuing care complex might have sales potential in Sudbury, as some nearby facilities have long waiting lists. However, the current economic environment makes it very difficult to finance construction for these developments, even though demographics suggest that the market is strong. Single Family: The average price for a single family home in town is $646,000, while newly constructed homes are selling for well over $1M. While the market for luxury single family homes continues to be strong, a variation on this market might be smaller sized single family homes on smaller lots or with common open space, such as the Mill Corner neighborhood in Acton, where units sell in the range of $500,000, or Cookingham Greene, a senior community located in Ashland. POTENTIAL DEVELOPMENT PROGRAM Given the physical characteristics and market context described above, six options were selected for further analyses which were identified as having the strongest potential for redevelopment at this site. In preparing these development concepts, it was assumed that the zoning and permitting process would be established which would facilitate the projected use. Table 5 Value Ranking of Alternatives Buildout (Sudbury Portion Only) Potential Land Value Marketing Time Multifamily Rental 250 units $7.5M - $8.75M years Garden Style Condo 250 units $11.25M $13.75M 3-5 years Townhouse Condo 83 units $6.5M $8.0M 2-4 years Single Family (40,000 s.f.lots) 15 units $3.75M - $4.0M 1-2 years Office 260,000 s.f. $2.6M - $3.9M 10+ years Assisted Living 90 units?? years 10 Town of Sudbury, Housing Production Plan, July 14, 2011, p. 14 Sept 06,

11 Multifamily (Rental or Condo) Townhouse Condo Office Table 6 Development Program Description Development Program Buildout Description Building Height Parking Ratio Office 260,000 s.f. 3 bldgs of 88,000 sf each 4 stories 5 spaces/1,000 sf Multifamily Rental or Condo 250 units 7 bldgs; units per building; 10 units/floor avg 1,350 sf/unit, mix of 1, 2 and 3 BRs; avg 2 BR 3-4 stories 2 spaces/du Townhouse Condo 83 units 21 bldgs, 4 units/bldg avg 2,200 sf/du, 2BR 2 stories 2 spaces/du Sept 06,

12 MELONE PROPERTY MARKET ANALYSIS FULL REPORT INTRODUCTION The Town of Sudbury asked, a land use planning firm, and its consultant team to investigate the potential land value of a Town-owned site (formerly known as the Melone property) along North Road in the northeast corner of Sudbury if it were to be sold by the Town for private redevelopment. 11 For years, the site has been used for sand and gravel excavation. However those operations will end in approximately two years. Many options for reuse of the Melone property have been suggested - ranging from Town recreation to housing and commercial development. This study investigates the market for a range of private redevelopment alternatives, seeking to identify the highest and best use. This study does not take into consideration factors such as local priorities for public purposes which would be considered in a redevelopment plan, or fiscal impacts of development, nor are combinations of public and private uses explored in depth. After examining the market potential and physical feasibility of the site to accommodate a broad range of commercial and residential development scenarios, the consultant team found short term market feasibility for a range of residential uses. Other than office which has long term potential, the commercial uses that had been initially suggested were determined to not be marketable at this location. Several styles of residential development were considered in this analysis. Sample site plans were developed to illustrate some these uses, and an order of magnitude estimate was established of the value of the site to the Town if the property were marketed for these respective alternatives. This analysis assumes a friendly permitting process for the respective uses, which would likely require future zoning changes and local initiative. Given the uncertainty of the time frame for redevelopment of the parcel, economic trends, and local priorities, the estimates of value are intended for rank comparison purposes, and only reflect current estimated market value. 11 The Team includes Bluestone Planning Group, Urban Design, Avery Associates, Appraisal, and GPR Engineering. Sept 06,

13 CONTEXT Study Area The proposed development site is a group of properties which formerly comprised the Melone property, located on Route 117 on the northern edge of the Town of Sudbury. The Town-owned portion of the former Melone property straddles the Town line, having 20 acres in Sudbury and 16 acres in Concord. Another 10 acre portion of the former Melone parcel on the Sudbury side was dedicated for conservation purposes and is managed by the Conservation Commission. Adjacent to the former Melone parcel is a 7 acre parcel owned by the Sudbury Water District which also has a communications cell tower located on it. This Water District parcel will also be incorporated into a future development scenario. An additional privately-owned one-acre parcel, the Wagner Parcel, which fronts on Route 117 between the Town and Water District properties, will also be incorporated into future development scenarios. Table 1 Site Gross Area and Net Developable Area Total Area (acres) Developable Area (acres) Town (Melone) Property (Sudbury) Town (Melone) Property (Concord) 16 4 Town (ConCom) Property 10 0 Water District Property Wagner Property 1 1 Total Study Area Total Sudbury Portion Map 1 Melone Property Existing Conditions / Development Areas Sept 06,

14 Physical Description Topography The majority of the study area has been excavated over several decades for sand and gravel. Excavation is now scheduled to be closed in two years and graded to a relatively flat elevation - between 130 and 140 feet in height at its center, which are approximately the existing elevations along adjacent North Road. This re-graded flat portion of the site is surrounded on all sides by steep slopes (20-30 % grades), particularly on the west, that rise as much as 60 or 70 feet above the flat portion of the site. Depending on the ultimate re-use of the site, large amounts of additional cut and fill, or high retaining walls at substantial construction cost would be required in order to extend the buildable (flat) portion of the site into these surrounding steep slope areas. For purposes of this study, we will assume that these steep slopes will be avoided since their slopes are too great to economically accommodate development. Therefore, we have identified a red line indicating that portion of the site which will not be constrained by steep slopes. The steep-sloped portions of the site in both Sudbury and Concord were excluded from the developable area, recognizing that the cost of site preparation will increase as development extends into the projected slopes. However, the raised embankment that now separates the site from the length of North Road will be re-graded to allow better visibility and access to the site. The relatively flat but higher elevation western portion of the Town-owned former Melone parcel (3.6 acres) is excluded from the estimated buildable area because it is presumed that it would require access through Northwood Rd. and the Northwoods housing site, which may not be obtainable. Environmental Conditions The site is surrounded, to the north and east, with both wetlands and a river/creek system. State and local wetland restrictions require a 100 foot buffer zone surrounding all wetlands, and a 200 foot buffer zone around the rivers. These buffer zones cannot be intensely developed, except possibly, disturbed sections within the outer 100 foot zone surrounding rivers. In all cases, based on the maps provided by the Town indicating these restricted buffers, we do not illustrate development within these zones. A public water supply well located just south of the Water District parcel across Route 117 imposes a 400 foot buffer zone wellhead protection area which extends up to the cell tower on the Water District parcel. The Water District would prefer to maintain a buffer zone along the frontage of its parcel (and possibly including the Wagner parcel) parallel to Route 117 to allow for future well head expansion. Once that location is determined, a 400 foot radius zone will be circumscribed around it as well. Access Current access to the site is from a curb cut on town-controlled Route 117 through the Water District parcel. This is not optimal for future use, due to the fact that the driveway is within the wellhead protection zone and a wetland buffer area. An entrance to the new development can be more suitably located along the Town-owned or Wagner property frontage. Sept 06,

15 Town of Concord regulations require that access to any subdivision through another town must be via an access road which is a public way at the time of approval. 12 In this analysis, we assume that such access road will be made a public way to meet Concord requirements for access to its land if a subdivision is contemplated. Cell Tower A 150 foot cell tower is located on the Water District Parcel. It would be advisable to restrict structures from the Fall Zone which is equal to the height of the tower. Parking, landscaped areas, and recreational fields could locate within this zone, however buildings should avoid it. Zoning & Regulations The Sudbury owned parcels are now zoned Research District, and are within Zone 2 of the Water Resource Protection District. The Concord portion of the former Melone property is zoned AA Residential (2 acre lot single family homes), and also in the Groundwater Conservancy District. Therefore, Concord would only consider very benign uses to be located there. Uses such as fertilized recreation fields or multi-family residential uses, for example, would not likely be approved. 13 Net Buildable Area The Primary Development Site that is considered in the market analysis and alternatives assessment is the developable portion of the study area located in Sudbury only (as shown on Table 1), subtracting the areas with development constraints as described above. An Expanded Site Alternative has been considered, extending into the developable portions of the Concord side of the site. However, any proposed development on this Concord portion of land will have to be designed as a separate independent phase, so as not to encumber or make dependent any Sudbury approvals for redevelopment of the land on necessary approvals and permits from the Town of Concord, which may not be granted. The value of development in Concord is therefore not included in this report. Primary Development Site (in Sudbury): Gross Land Area = 28 acres [Town-owned, Water District and Wagner property] Net Buildable Land = ~17 acres * Net / Gross Ratio = 61% Expanded Site Alternative (in Concord): Gross Land Area = 16.6 acres Net Buildable Land = ~4.0 acres Net /Gross Ratio = 24% 12 Town of Concord Subdivision Rules and Regulations Section 6.2.3: Subdivision Straddling Municipal Boundaries - The Planning Board will not approve a subdivision of land where access to the subdivision tract in Concord is through land in another Town, unless the access is an accepted public way at the time the subdivision application is submitted. In general, lot lines should be laid out so as not to cross municipal boundaries. 13 Marcia Rasmussen, Concord Director of Planning and Land Management Sept 06,

16 Surrounding The site is located off North Road (Route 117), a rural but often busy road connecting the towns of Concord and Maynard, and is situated 2.5 miles from the train station in West Concord and 3 miles from the Lincoln train station. Surrounding the site is a rural setting. Wetlands border to the north and east, agricultural fields and a water supply well to the immediate south, and a series of walking trails abuts the parcel in the town of Concord. West of the parcel are two age restricted developments and an office development in a campus setting. Northwood housing development consists of two 3 story buildings, with 4 units/floor, for a total of 24 condo units selling on average for around $350,000. The site is permitted for an additional 19 units. Adjacent to this development is Frost Farm, a townhouse complex which was developed with town subsidy and contains 44 age restricted ownership units. An office building, constructed in two phases and developed by Cummings Properties lies to the west of the site between these two housing developments. The first phase, known as 142 North Road consists of a two story 70,000 sq ft building that is 80% occupied with primarily nonprofit uses including Apple Valley School and offices for the Massachusetts State Police. The second phase, known as 144 North Road, is a three story office building addition. Although rent-up for Phase Two took almost 5 years, 144 North Road is now entirely leased to Revolabs. Map 2 Features in Adjacent Parcels Local and Regional Context/Market Areas The former Melone site is located in the center of a rural area of the western suburbs almost equidistant (7 to 10 miles) between Routes 128 and 495. Access and development is limited by the presence of the Assabet and Sudbury Rivers, wetlands, large open spaces, golf courses, Sept 06,

17 farms, and the semi-rural towns of Acton and Concord to the north, Lincoln and Wayland to the east. Within 2.5 miles of the site, (a 5-10 minute driving radius), is convenience shopping located at three neighborhood centers along Route 62: Maynard Center, Powder Mill Plaza in Acton, and West Concord where a commuter rail station is also located. Nearby shopping is less than a mile from the site at the intersection of Sudbury Road and Route 117 and is limited to a Dunkin Donuts, two restaurants and a convenience store, as well as several garden centers and Verrill Farms. The area within a 5 mile radius surrounding the site, (a minute driving distance depending upon the time of day), captures the primary market area serving this site. Retail centers exist in all directions including Route 2 and Concord Center on the north, Route 20 in both Sudbury and Wayland, both with major destination shopping and office uses and a mixed use center under construction, and Lincoln center on the West. Two additional commercial centers are located to the west at the periphery of the 5 mile ring in Stowe and in east Acton. Map 3 Local and Regional Market Context Sept 06,

18 Demographic Trends As an established suburban community with a population of 17,659 in 2010, the Town of Sudbury has had steady, moderate population growth, just under 5% since 2000, and is projected to continue at a similar pace over the next decades. Within the 5 mile market radius of Sudbury, cities and towns including Framingham, Marlborough, and Acton have slowed or lost population since 2000 and are expected to continue with low growth rates. Other smaller towns including Concord, Stow, Hudson, Wayland, and Weston are anticipated to absorb the region s major population growth in the next decade. Over all, the Town of Sudbury s population density is moderate density within the market area. (See Table 2). Table 2 Regional Population Growth Municipality U.S Census 2010 Population Density (persons per sq. mile) Population Change % Change Population Change % Change MAPC Projected Population Change % Change Acton 21,924 1,096 2, % 1, % % Concord 17, % % % Framingham 68,318 2,628 1, % 1, % % Hudson 19,063 1, % % 1, % Lincoln 8, % % % Marlborough 38,499 1,750 4, % 2, % % Maynard 10,106 1, % % % Southborough 9, , % % % Stow 6, % % 1, % Sudbury 17, , % % % Wayland 12, , % % 1, % Weston 11, , % % 2, % Regional Totals 24,2532 1,111 17, % 9, % 8, % Source: U.S. Census, projections by MAPC MPAC Projections Figure 1 Town of Sudbury Population Change since 1990 Source: U.S. Census, projections by MAPC Counter to the national trend of shrinking households, the Town of Sudbury has had a steady and slightly increasing household size over the past two decades (see Table 3). Sept 06,

19 Sudbury s median age has increased significantly since The population of older adults aged 45 and above is growing fastest, while the proportion of adults between 25 and 44 years old is diminishing. Aging in place, persons aged 65 and over are the next fasted growing demographic. A clear decline in the population of children under 5 years old since 2000 echoes the drop in the population of young and middle aged adults who are typically starting families. In contrast, the population of school-aged children has increased over this time, corresponding with older parent households. Table 4 Town of Sudbury Age Profile, % 2000 % 2010 % 2020 % Under 5 years 1, % 1, % % 1, % 5 19 years 3, % 4, % 4, % 3, % years % % % % years 4, % 4, % 3, % 2, % years 3, % 4, % 5, % 7, % 65 and over % 1, % 2, % 2, % Total 14,358-16,841-17,659-18, % Median Age , % Source: U.S. Census, MAPC Table 3 Town of Sudbury Population and Household Change Year Pop. % Change Hslds. % Change Pers. per Hsld ,358-4, , % 5, % , % 5, % 3.06 Source: U.S. Census, MAPC The median household income in Sudbury is $153,295 in 2010, which is the highest among all neighboring towns and cities within the 5 mile market area (see Table 5). Sudbury s median household income has increased by almost 30% between 2000 and 2010, the third highest rate of growth in the region, indicating that Sudbury s households will likely remain at the high end of the regional economy. A close look at Sudbury s household income statistics reveals that different types of households have different income levels. The highest median household income occurs among householders aged between 25 and 44, followed by 45 to 64 year old householders. The income of senior households drops dramatically. Furthermore, median income of owner occupied households is more than four times higher than that of the renter occupied households (see Figure 2). Table 5 Regional Median Household Income Municipality 2010 Household Income Income Growth Weston $148, % Acton $105, % Framingham $64, % Stow $117, % Maynard $75, % Concord $119, % Marlborough $71, % Hudson $74, % Wayland $129, % Sudbury $153, % Southborough $140, % Lincoln $121, % Source: 2010 American Community Survey 5- year Estimates, Sept 06,

20 Sudbury residents are more likely to have higher education, especially in terms of professional and graduate education. Compared to Middlesex County and the state, Sudbury is less socially diverse, with fewer minority residents, a smaller foreign born population and fewer residents who speak another language at home. By Age of Householder By Tenure Figure 2: Town of Sudbury Median Household Income Distribution Source: 2010 American Community Survey 5-year Estimates, Note: There are only 14 households counted in the year old householders group. The low income possibly reflects combined households. On the other hand, Sudbury has a much higher proportion of family households than Middlesex County or state on average, in particular families with children. Just above one tenth of households are composed of single individuals. Table 6 Town of Sudbury Social Characteristics Sudbury Middlesex County Massachusetts Finished HS 96.7% 91.8% 89% Bachelor s Degree 35.1% 25.4% 33% Professional or Graduate Degree 39.2% 24.5% 16% White 90.8% 80% 80% African American 0.8% 4.7% 7% Asian 5.9% 9.3% 5% Hispanic 2% 6.5% 10% Foreign born 9.6% 18.4% 12% Non-English spoken at home 13% 23.7% 19% Family Households 85.7% 63.1% 63% Families with children 49.7% 29% 28% Married couple/no children 32.2% 26.9% 46% Single parent households 9% 13.7% 9% Non-family households 14.3% 36.9% 37% Householder living alone 11.9% 27.8% 29% Source: 2010 American Community Survey 5-year Estimates, Sept 06,

21 Economic Trends The Town of Sudbury has a strong economic base, with businesses that provide more than 8,000 jobs, nearly equal the number of Sudbury residents in the labor force. Sudbury residents are more likely than the regional average to be employed in white collar positions, especially management, business, science and arts occupations. These tend to be higher paying than other occupations. Sudbury residents are less likely to be employed in service or blue collar positions, while percentage of sales and office occupations is close to the regional ratio (see Table 8). Table 7 Jobs to Labor Force Ratio Town Labor Force Jobs Jobs/Labor Force Ratio Acton 11,038 9, % Concord 7,867 11, % Framingham 39,230 44, % Hudson 10,825 9, % Lincoln 3,104 1, % Marlborough 22,685 28, % Maynard 5,694 4, % Southborough 5,164 7, % Sudbury 8,269 8, % Stow 3,759 1, % Wayland 6,597 3, % Weston 4,690 4, % Source: Mass Labor and Workforce Development. Data accurate for Jan, 2012 Table 8 Town of Sudbury - Employment by Occupation Sudbury # Sudbury % Middlesex County % White Collar 3, % 73.3% Management, business, science, and arts 5, % 52% Sales and office occupations 1, % 21.3% Services % 14.5% Blue Collar % 12.2% Natural resources, construction, and maintenance % 5.9% Production, transportation, and material moving % 6.3% Source: US Census American Community Survey 5-year Estimates, Sudbury s unemployment rate has consistently stayed below state-wide and national levels over the past decade, indicating a very resilient local job market. Local unemployment rate has been around 6% since 2009, from an average of 3-4% between 2002 and 2008, and has been showing a down trend after reaching a peak in Sept 06,

22 % Unemployment Rates since 2001 Year Figure 3 Unemployment Rates since 2001 Source: Mass Labor and Workforce Development The largest proportion of jobs located in Sudbury is in Education and Health Services, followed by Trade, Transportation and Utilities. Sudbury offers a relatively higher proportion of jobs in these industries than Middlesex County. Sudbury has a substantial number of professional and business services jobs, but has a relatively smaller share than Middlesex County. Other major employers include leisure and hospitality services. Table 9 Employment and Average Wage by Industry in Sudbury (2010) Industry Establish -ments # of Empl. Sudbury % Empl. Avg. Weekly Wage Middlesex County % Empl. Avg. Weekly Wage Natural Resources and Mining % $ % $1,090 Construction % $1, % $1,226 Trade, Transportation and Utilities 118 1, % $ % $942 Information % $1, % $2,171 Financial Activities % $1, % $1,578 Professional and Business Services % $1, % $1,826 Education and Health Services 64 1, % $ % $1,051 Leisure and Hospitality % $ % $400 Other Services % $ % $630 Public Administration % $1, % $1,179 Total/Average 632 8,172* $1,160 $1,039 Source: MA Executive Office of Labor and Workforce Development (EOLWD). *Employment and Wage data are derived from reports filed by all employers subject to unemployment compensation laws. This may exclude some small businesses and result in data discrepancy due to suppression. Industry employment and payroll information is produced both quarterly and annually. Sept 06,

23 Wages for jobs in Sudbury are lower than average for Middlesex County but higher than that of Massachusetts. Average wages have been growing at a higher rate compared with County and State level over the past decade (see Table 10). Table 10 Average Annual Wage Sudbury Middlesex County Massachusetts 2001, 3rd Quarter $45,051 $50,213 $42, , 3rd Quarter $62,884 $69,141 $58,087 Change % 37.7% 35.4% Source: MA Executive Office of Labor and Workforce Development A similar proportion of Sudbury residents (20-25%) find jobs locally (i.e., Sudbury and Concord), commute to Boston/Cambridge, or work in the interstate ring surrounding the Metrowest region, (i.e., Waltham, Framingham, Marlborough, Natick, Newton, and Burlington). In contrast, Sudbury employees come from a broad distribution of neighboring towns and more distant cities such as Boston and Worcester (see Table 11). Table 11 Journey to Work Work Place of Sudbury Residents Place of Residence for Sudbury Employees Sudbury 1,507 Sudbury 1,507 Boston 1,237 Marlborough 805 Waltham 540 Framingham 627 Framingham 448 Hudson 315 Cambridge 441 Boston 271 Marlborough. 363 Natick 201 Concord 248 Maynard 188 Natick 206 Wayland 178 Newton 204 Waltham 140 Burlington 190 Worcester 123 Other Towns 2,555 Other Towns 3,435 Total 7,939 Total 7,911 Source: US Census Employment in Sudbury is projected to increase slightly by 2020, especially in the service sector and decline slightly by 2030 due mainly to diminishing employment in basic industries. Neighboring towns and the region provide a relatively higher proportion of jobs in the service sector, which is expected to grow over the next two decades. Sept 06,

24 Sudbury Neighboring Towns Regional Employment Center Figure 4 Employment Projections Source: MAPC MetroFuture Employment Projections, 2011 (based on 2008 employment estimates) Neighboring towns include Acton, Concord, Hudson, Lincoln, Marlborough, Maynard, Wayland, and Weston. Regional employment centers include Framingham, Boston, Natick, Needham, Newton, and Wellesley. Housing Trends Sudbury has 5,771 housing units as of 2010, an increase of approximately 267 units since Over 90% of the housing units in Sudbury are single family homes. 92% of households in Sudbury own their own homes. The number of homes in Sudbury has grown by 21% since 1990, a moderately high rate of growth compared with neighboring towns. Since 2007, the Town has absorbed an average of 30 new homes per year. The predominance and cost of single family Table 12 Regional Housing Growth, Municipality % Change Lincoln -11.2% 65.2% Maynard 3.3% 68.0% Framingham 4.7% 58.2% Weston 6.6% 88.8% Concord 12.3% 81.1% % Ownership (2010) Figure 5 Existing Housing Types in Sudbury, Fam >1% Condo/ Twnhs 5% Multi Rental 3% Acton 16.1% 79.1% Wayland 16.2% 89.2% Hudson 17.7% 75.1% Sudbury 21.0% 94.2% Marlborough 29.4% 60.6% Stow 30.7% 88.4% Single Family 91% Southborough 42.1% 91.7% Source: US Census Sept 06,

25 homes in Sudbury likely contributes to the relatively larger household size and number of families with children; there are very limited housing options in town suitable for other household types, especially seniors or young adults. Multiple Listing Service (MLS) reports the average selling price in Sudbury for single family homes is currently at $646,000 (April-June 2012). The median sales price was $660,000 in the second quarter of Sudbury s home prices are considerably higher than neighboring communities, with the exception of Concord, which is slightly higher. Median Sales Price since Figure 6 Median Sales Price in Sudbury and Middlesex County, Source: The Warren Group The average assessed value of all single family homes in Sudbury in FY 2011 was $628,000, about 75% higher than the average value of $359,000 in FY 2000 (MA Dept. of Revenue) 14. In contrast to median sales price which peaked at about $737,000 in 2005, assessed valuation continued to rise through 2007, when average valuation peaked at $703,000. Home values in Sudbury are consistently more than 50% higher than average for Middlesex County, although median price for Sudbury condominiums fluctuated between 2002 and 2008 (see Figure 6). 14 Sales price reflects the market value for a selection of homes which were sold during the period recorded; average assessed value captures the estimated value all of the town s single family housing stock each year. Sept 06,

26 Table 13 Regional Housing Market Community Single Family Homes Condos Median Selling Price # of Sales Median Selling Price # of Sales Acton $519, $230, Concord $700, $418, Framingham $294, $87, Hudson $256, $200, Lincoln $900, $410, Marlborough $256, $130, Maynard $298, $237, Southborough $487, $485, Stow $417, $364, Sudbury $635, $597, Wayland $555, $556, Weston $1,150, $465, Source: The Warren Group, January December, 2011 Area Traffic Conditions North Road / Route 117 is the primary and only access to the site. Route 117 is a two lane east/west state numbered road which is maintained by the Town of Sudbury. Other than at the commuting hours when the road is very busy, North Road provides convenient access to the site. Route 117 runs parallel to and south of Route 2 by about 2.5 miles and serves during commuting hours as a bypass to Route 2 for those who find this road less congested. Route 117 has about 14,500 vehicles per day; Route 2 East of the Concord Rotary has 44,000 cars per day. North/South access in the vicinity of the site is limited to Concord Road which is located east of the former Melone site and extends into Concord to the north and to the Sudbury historic Town Center to the south. A second north/south road is Route 27 which has a similar volume to Route 117. On weekday peak hours in the morning and evening, all of these roads operate with a Level of Service (LOS) F 15, having traffic backed up thorough multiple light phases. 16 Route 20, South Sudbury s east/west roadway, has approximately 22,000 cars per day and similar conditions for commuter traffic. 15 Lever of Service (LOS) A= Free flow; B=Reasonably free flow; C=Stable flow; D=Approaching unstable flow; E=Unstable flow; F=Forced or breakdown flow 16 The Cecil Group, Sudbury Center Improvement Plan, March, 2008, p. 7. Sept 06,

27 MARKET ASSESSMENT OF LAND USE ALTERNATIVES Overview A Steering Committee of Town staff and elected/appointed board and committee members identified a range of alternatives for consideration. 17 The market for a variety of commercial and residential uses was evaluated based upon the preceding Issues and Opportunities Analysis, and a survey of the local and regional residential and commercial real estate market. Of the range of market segments analyzed, the consultant team has concluded that residential uses clearly have the greatest development potential at this location. There is potential for office development at this site, but it is a more long-term prospect for redevelopment. Table 14 Initial Market Assessment of Alternatives Land Uses Land Use Market Potential Near Term Long Term Minimal 1. Flex Space 2. Solar 3.Commercial Recreation 4. Retail 5.Office 6. Residential (all types) Commercial Market The ongoing recession, the isolated location, the lack of convenient amenities such as public transportation and local retail, and the absence of any on site sewer present significant limitations to commercial development at the current time. By comparison, closer to Routes 128, 495, and in many of the adjacent village and town centers there are a large number of vacant commercial buildings and sites which are for lease or sale at reasonable prices. Industrial/Flex space: Flex space is a form of smaller scale warehouse or light industrial development, which could have a blend of industrial and office features. Typical tenants include local contractors office and storage space, manufacturing/sales, service businesses, and warehouse/distribution uses. There is not a strong market for this use at this time. A surplus of nearby, low cost flex space includes the old Digital complex on Parker Street, Maynard (400,000 and 150,000 sq. ft. buildings); the Stratus building on Route 62, Maynard (60,000 sq. ft.), and Romanow Box Company (60,000 sq. ft.) on Powder Mill Road in Maynard. There is also a lot of flex space for rent with good access on Route 495. Given area rents in the range of $6.50-$8.00/ sq. ft., it 17 Meeting Minutes, July 19, 2012 (Appendix 1) Sept 06,

28 would be a challenge to be able to finance new space for this modest income stream. Given the distance to major highways, this would be an unfavorable location for large-scale warehouse/distribution because it significantly increases transport costs. Many available sites are closer to major highways in the region. While there might be some demand for a limited number of users given the lack of this space directly in Sudbury, the concern that tenants might create environmental issues indicates a lack of support for this use, thus flex space is not recommended for further analysis for this site. Retail: The region is well-served by existing retail located along the major highway network. The site is not a strong candidate for large-scale retail, nor for neighborhood or specialty retail due to the isolated location, low density surrounding, poor visibility, congested road network, lack of sewer, and surplus of retail in the region along Route 62 in Maynard, Acton, Concord, and along Route 20 in Sudbury. Mixed Use: It is suggested that high-density residential development, especially with direct connections to neighboring residential and office developments could support small-scale convenience retail. Experience with recent mixed use projects shows that retail as part of a mixed use development will not thrive in a location which cannot support retail as a single use (Oak Grove Village in Melrose, as an example). More successful tenants of mixed use commercial spaces have been cafes and restaurants, as well as gyms and exercise studios, which provide common meeting spaces and resident amenities. A small amount of retail could enhance a residential or office development in this location, but would not add significant land value to the project. Commercial Recreation: The limited potential market for commercial recreation makes this use highly unlikely due to the constraints of high construction costs for a new facility, competing facilities in the region, and lack of clearly identified sports programming needs. A typical sports complex contains some 80,000 sq ft and requires a revenue stream of some $3,000/day in income to cover the costs of debt service and operations for a new facility. 18 Four major competing facilities contain the major sports recreation activities which are in demand in the Sudbury region. These facilities listed below provide a range of indoor/outdoor fields for soccer, lacrosse and field hockey, tennis, fitness /health clubs, swimming pools, golf, rock walls, classroom space, and skating rinks. Major nearby facilities include the Field House in Sudbury (80,000 sq. feet), ForeKicks with locations in Marlborough (135,000 square feet) and Norfolk (85,000 square feet), Teamworks in Acton (63,000 sq ft), and the New England Sports Club in Marlborough with a 218,000 square foot skating facility. In addition, the town has numerous recreation facilities in schools and parks including its own Sudbury Park and Recreation Center-Atkinson Pool. 18 Norman Gill, President, Pinnacle Indoor Sports consultant, Phone conversation, July 31, 2012 Sept 06,

29 Privately Developed Solar Farm: Given a requirement of 5 acres to generate one megawatt of electricity, the former Melone site could in theory produce up to 4 megawatts of power. While it could be possible for a developer to build a solar farm on the site, funding and regulatory issues make this a highly uncertain scenario. A project under 6 megawats could be eligible for net metering, connecting via on-street lines, although system upgrades may be needed to support larger projects. State legislation and incentives aim to facilitate independent renewable energy projects, however there have been few such large-scale facilities to date. There is a limited market for private developers purchasing sites for this use, as many of the installations being developed are on Town-owned property, the roofs of public and private facilities, or former waste disposal sites. Considering the complexity of the issues around the production and sale of renewable energy, it is beyond the scope of this analysis to suggest a feasible arrangement with a solar developer or to project the potential revenue or cost savings that could be generated from a solar farm on this site. While it might be productive to pursue a solar option, it is not possible at this time to compare the market value of this possible use to other development alternatives. Office: Regional statistics as well as local market conditions indicate that, while this might be a good location for a special purpose office building in ten+ years, there is no market for a Sept 06,

30 speculative office or medical office building at this time The experience of Cummings Properties 142 and 144 North Road office buildings (63,000 sq ft and 70,000 sq ft) is a case in point. The rent-up has been slow, and 142 North Road is only 80% occupied with rents of $17.97/ sq ft. Tenants include schools, some medical uses, nonprofits, and a State Agency. Revolabs, a new high tech audio products tenant is the one significant commercial tenant. Larger scale medical-related or nonprofit uses have not had a strong attraction to this location, possibly due to a limitation on septic system discharges, which would also apply to the former Melone site. Regional statistics support the assumption that this area has a surplus of space. 21 The Melone site is located between two sectors, Route 128 Mass Pike and Route 495 West. Within these corridors, the vacancy rate averages between 17.7% and 30.6%. The surplus of space has been noted at over 4.5 million sq. ft and the absorption of space has been negative to less than 100,000 sq ft. The Collier s Great Boston Market Viewpoint Report highlights two trends: It is no longer simply about rent per square foot; amenities and sustainability are critical. Select Class A, amenity rich buildings located along the stretch from Burlington to Needham and close to Route 128 will be the first to realize rental growth in Given the surplus of space and the secondary location of the Melone site, there is little likelihood that a demand for office use on this site would occur in the near or mid term. Residential Market Nationally, market conditions are strong for rental housing, as economic conditions have impacted homeownership rates. A national research services report, the Outlook, has stated that New and existing home sales now evince solid traction in sales volume and pricing, while permit issuance, especially for multifamily units, now approaches the highest levels in three years. 22 Multifamily permits are forecast to comprise more than 40% of total permits in 2012 and 2013, a ratio well above trends of the past 25 years. Local realtors tend to be a bit more cautious and have varying comments on a variety of market segments being considered including single family and condo ownership units, townhouses for rent or ownership, multi-family rental, age restricted and assisted living. Furthermore, although the Boston region and Sudbury in particular have insufficient multifamily housing to meet local demand, over 2000 units of multifamily housing located in the nine neighboring towns have been proposed under Chapter 40B over the past decade, of which close to half are still stuck in the financing and permitting stages. 23 There seems to be a consensus that with the construction of housing currently in the pipeline, the region will have an adequate supply of affordable senior housing, especially relative to the need for multifamily rental housing to serve families. Various specialists knowledgeable about the housing market and financing have indicated that the market for age restricted housing (market 19 Chip Detwiller, R.W. Holmes Real Estate 20 Colliers International, Second quarter report, Colliers International, Second quarter report,2012, p Marcus & Millichap, the Outlook, 2012, page 1 23 List prepared by from base data received from DHCD Sept 06,

31 rate and affordable) may be nearing saturation 24 A number of age restricted developments in the region have had occupancy problems and have requested conversion to market (non-age restricted) housing. Furthermore, State Agencies such as DHCD and MHFA want to see more family orientated multifamily housing before consideration would be given to funding additional senior related housing. In spite of these different assessments of the market and need, Holly Grace, Senior Project Coordinator for B nai B rith Housing, thinks that there continues to be a demand in Sudbury for affordable senior housing. Estimated Housing Demand Sudbury residents who seek alternatives to large single family homes are currently under-served. There is significant unmet demand for smaller units both ownership and rental, to serve seniors, as well as young adults and families. Figure 7 Housing Type Comparison Projected Demand for Housing Types Multi Rental 9% Condo/ Twnhs 7% 2 Family 7% Other 2% Single Family 76% The estimated housing preferences, depicted on Table 15, is developed by Larry Koff & Associates based on trends and observations from a range of studies 25. Families with children and older adults are most likely to prefer single family homes, while seniors, young adults, and other types of households have more varied housing preferences, reflecting economic and lifestyle situations. In particular, demand for alternative types of housing is driven by smaller household sizes, desire to minimize maintenance requirements, and greater accessibility to community amenities and recreation opportunities. While this comparison reflects the current (2010) population, the types of housing that are under-represented are also more appropriate for 24 Bonnie Heudorfer, Massachusetts Housing Market Assessment, Co-author with the University of Massachusetts Donahue Institute of a 2008 statewide housing market assessment for the Department of Housing and Community Development, Michael Jacobs, MHJ Consulting, former Senior Development Officer/ Massachusetts Housing Finance Agency, Boston, Ma. 25 The Market for Smart Growth, By Gregg Logan, Stephanie Siejka and Shyam Kannan Robert Charles Lesser and Company, LLC, 2009; Where We Want To Be: Home Location Preferences And Their Implications For Smart Growth, 25 May 2012, Todd Litman, Victoria Transport Policy Institute Sept 06,

32 the needs of the growing population of seniors who seek to stay in the community as they age. The comparison indicates a potential shift in approximately 15% of the households in Sudbury (or approximately 800 units) away from single family residential to other types including 2 family, multifamily rental and condos or townhouses could be marketable. Table 15 Estimated Housing Demand: Alternative Housing Types Household Types Individuals or Couples, Age 75+ Individuals or Couples, Age Indiv./Couples, Age 35-64, No Children Young Adults, up to age 34 Households with Children/Families % of HH (2010) 533 9% % 1,552 27% 211 4% 2,435 42% Single Parent Families 389 7% Estimated Demand (% of total) 5, % Single Family Homes Estimated Housing Type Preference (1) 2-Family or Townhouse Multi-family Condo Est Total Households Multifamily Rental Other (2) % 10% 25% 25% 15% % 5% 20% 10% 5% % 5% 5% 5% 0% % 25% 25% 30% 0% % 5% 0% 5% 0% % 10% 5% 10% 0% 4, % 7% 7% 9% 2% Existing Supply 5,555 5, Source: 2010 Decennial US Census, LKA, 2010 ACS 5-Year Estimate (3) 91% 0.7% 5% 3% (1) Approximately half of the two-family units are assumed to be rental. (2) May include manufactured home community, assisted living, nursing home, or other group living arrangement. (3) Discrepancy between total number of households and existing supply of housing units due to ACS estimate versus Decennial Census count. Condos and multifamily apartments in a village setting, with proximity to retail and services are attractive alternatives for older households seeking to downsize their living arrangements, as well as young adults. Perception of safety, a walkable environment, and connection to trails and community facilities will enhance demand for multifamily units, particularly among older households. Lack of convenient highway or transit access, on the other hand, may limit demand for multifamily housing targeted to commuting households. A comparison of home values to household incomes in Sudbury shows that the market is concentrated at the upper range. The average assessed value for a home in Sudbury was $621,000 in 2012, which is affordable to homebuyers earning over $150,000 per year. There is significant unmet demand for housing to serve smaller Sudbury households and those below the Sept 06,

33 high income bracket. In particular, single person households 56% of whom (among Sudbury households) are over the age of 65 are in need of smaller, more affordable housing options. Figure 8 Housing Affordability Comparison Home Values Over $600,000 57% $150,000 1% $350,000 6% $600,000 36% Source: 2010 American Community Survey 5 year estimates Home Value grouping based on the approximate price that would be affordable to purchase at each income range. Table 16, Households in Sudbury by Size and Income Households % Median Income (rounded) 1 person 684 (56% over age 65) 12% 40,000 2 persons 1,749 30% 150,000 3 persons 1,079 19% 150, persons 2,259 39% 200,000 Multifamily Rental: The apartment rental market is strong, nationally and in the region 26. Apartment units appeal to all age groups and income levels, although isolated sites with limited access to transit, shopping, or services, are a discouragement to some prospective developers. Typical market rents range between $1,600-$3,000 for new construction in the region. 27 An example of a mixed income rental housing that provides a comparable model is the Mews Development in Concord, a 40B project with 350 rental units, including townhouses and 3-story buildings, ranging from 700 to 1,500 square feet per unit at a density of 8.5 units per acre. Market rents range from $1,595/month for a one bed and bath to $3,100 for three bedroom townhouse. 25% of the units are reserved for renters earning 70% of Area Median Income. Nearly half of the 88 affordable units are still vacant (since the development opened in January 2012), including all of the 1-bedroom units and some of the 2-bedroom units. The rent for affordable 1-bedroom units, at $1,203, may not correspond with the incomes of 1-2 person households who qualify for subsidized housing units. Moreover, the lack of public transportation detracts from the suitability of units for households with low and moderate incomes. 26 Marcus & Millichap, the Outlook, 2012, page On site manager, Concord Mews. Sept 06,